Buying your first home is exciting—but figuring out how to qualify for a loan? That can feel overwhelming. If you're wondering,
“How do I apply for an FHA first-time home buyer loan?”
You're not alone—and you're in the right place.
FHA loans are one of the most popular loan programs for first-time buyers because they offer low down payments, flexible credit requirements, and government backing that opens the door to homeownership for more people.
In this guide, you’ll learn how to apply for an FHA loan, how credit score affects your options, and how Loan Factory can help you navigate the process from start to finish.
An FHA loan is a mortgage insured by the Federal Housing Administration, designed to help buyers with limited savings or lower credit qualify for home financing. These loans are issued by approved lenders—not the government itself—and come with flexible terms that are especially attractive for first-time buyers.
→ Read more: What Is an FHA 203k Loan? Complete Beginner’s Guide
Why First-Time Buyers Choose FHA Loans
- Down payments as low as 3.5%
- Flexible credit requirements (as low as 500 FICO)
- Lenient debt-to-income ratios
- Use of gift funds and down payment assistance allowed
- Competitive interest rates, even with moderate credit
FHA Credit Score & Down Payment Requirements (Updated for 2025)
FHA Credit Score & Down Payment Requirements (Updated for 2025)FICO Credit Score | Minimum Down Payment | Eligibility |
580 or higher | 3.5% | ✓ Full FHA access |
500–579 | 10% | ✓ Limited access (requires larger down) |
Below 500 | Not eligible for FHA | x Ineligible |
If your FICO score is between 500–579, you can still qualify for an FHA loan—but you’ll need to put down at least 10%.
Some lenders may impose overlays and only accept 580+, so working with a mortgage broker who has access to flexible lenders is key.
Steps to Apply for an FHA First-Time Home Buyer LoanHere’s how to go from researching to getting approved:
Step 1: Check Your Eligibility
To qualify for an FHA loan, you’ll generally need:
- Credit score of 580+ with 3.5% down, or 500–579 with 10% down
- Stable income and job history (typically 2+ years)
- Debt-to-income (DTI) ratio under 43% (some exceptions apply)
- The home must be your primary residence
- You must have a valid Social Security number and lawful U.S. residency
Step 2: Get Pre-Approved With an FHA-Approved Lender
Getting pre-approved helps you:
- Know how much home you can afford
- Make stronger offers when house hunting
- Fix any financial issues before applying
You’ll typically need to provide:
- Pay stubs (last 30 days)
- W-2s or 1099s (last 2 years)
- Tax returns
- Bank statements
- Government-issued ID
Step 3: Compare Loan Offers
Even though FHA guidelines are federally set, rates, fees, and service vary by lender.
Working with a mortgage broker like Loan Factory means you get:
- Access to 245+ FHA-approved wholesale lenders
- Side-by-side comparisons to find your lowest rate
- Honest guidance to help you choose what’s best for your situation
Step 4: Make an Offer and Start the Loan Process
Once your offer is accepted:
- The lender locks in your rate
- The loan enters underwriting
- An FHA appraisal will verify value and condition (FHA has safety standards)
- You’ll get a loan commitment and move toward closing
Step 5: Close on Your New Home
In the final days, you’ll review your Closing Disclosure, sign final loan paperwork, and pay your down payment and closing costs.
After that: you get the keys!
→ Read more: Connect with an FHA Loan Officer Near Me for Easy Approval
FHA Loan vs. Conventional Loan: Quick Snapshot
Feature | FHA Loan | Conventional Loan |
Minimum Credit Score | 500 (with 10% down) | 620+ |
Down Payment | 3.5% (580+ score) | 3–20% |
PMI | Required (MIP, possibly for life) | Required if <20% down |
First-Time Friendly | Yes | Yes |
Debt-to-Income Flex | More flexible | Stricter limits |
Property Rules | Must meet HUD guidelines | More lenient |
Why First-Time Buyers Trust Loan Factory
Buying your first home can feel overwhelming—but it doesn't have to be.
Loan Factory was built to help you buy a home without the stress of hidden fees or complicated steps. When you work with us, you get more than just a mortgage—you get a trusted partner who puts your needs first.
- No Application Fees or Junk Fees
You won’t be charged unnecessary extras—no application fees, no processing fees, no junk fees. What you see is what you pay.
- Only Real, Required Costs—Nothing Hidden
The only expenses you’ll need to cover are standard third-party and government fees, such as the appraisal and title search/title insurance. We’ll help you understand every line item—no surprises, ever.
- Upfront, Transparent Quotes from Day One
You’ll receive a clear Loan Estimate early in the process, so you know exactly what to expect at closing.
- Compare Over 240+ FHA-Approved Lenders
Instead of offering just one loan option like most banks, Loan Factory lets you compare real-time rates and fees from 240+ FHA lenders to find the best deal for your situation.
- Local Advisors Who Understand Your Needs
Our licensed loan officers take time to understand your financial profile and the area where you want to buy, offering personalized advice and support that generic online lenders simply can’t match.
“We help first-time buyers qualify and close with confidence—even with credit scores as low as 500.”
— Thuan Nguyen, CEO & America’s #1 Loan Officer
Ready to Apply for an FHA Loan? Let’s Get You Home.
Whether your credit is 720 or 510, we’ll walk you through your options with clarity and care.
FAQ: Apply for an FHA First-Time Home Buyer Loan
Can I get an FHA loan if I'm a first-time buyer with bad credit?
